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Real Estate Question-Selling my house redo basement flooring or no?

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Real Estate Question-Selling my house redo basement flooring or no?

Old 10-14-11, 05:07 PM
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Real Estate Question-Selling my house redo basement flooring or no?

I've been in my house almost 5 years and I'm planning on moving into my girlfriend's condo at some point hopefully in the next couple of months. I will be putting my house on the market (not interested in renting it and I have an FHA mortgage anyway so I am not allowed to rent it).

My basement flooded during Irene because I lost power and my sump pump couldn't run. I had insurance so the water was removed, the room was dried professionally for several days, and the carpeting was ripped out. I also purchased a battery backup system for my sump pump that will be staying with the house. All that's left is I have to do some minor drywall repairs some lower sections and replace the flooring (which the check from the insurance company should cover).

Which brings me to my question. I was planning on putting some durable and inexpensive flooring down there most likely vinyl plank. I live in a middle class neighborhood and my house is far from luxurious so I don't think it would be out of place for the area. However, my brother in law seems to think that I should forgo redoing the floor down there and just leave it as is (concrete with remnants of glue from the old carpet). He thinks that I wouldn't recoup enough of the cost to justify it. It's an all below grade basement with a few windows and a hatchway, but it's just used as a bonus room (about 800sq ft finished as one room, about 400 as utility room with the furnace, etc).

I know the market isn't great, but I think I'm in a decent position since prices in my area haven't tanked like in others plus I am walking distance from a state university so that may make it an attractive purchase of rental for someone.

My gut says put in the flooring since some people wouldn't want to tackle that kind of job on a house they're buying (especially a first timer) but maybe I offer a flooring credit for that. I don't know if it would be worse to have flooring that people didn't like or no flooring at all.

This is the first property I've ever owned and sold so any advice is appreciated.
Old 10-14-11, 05:22 PM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

1) FHA loan does not keep you from renting it.
2) Ask a realtor as improvements, and whether or not it is worth doing, is pretty market specific.
Old 10-14-11, 06:55 PM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

Originally Posted by kvrdave View Post
1) FHA loan does not keep you from renting it.
2) Ask a realtor as improvements, and whether or not it is worth doing, is pretty market specific.
Thanks for the info I'm going to talk to a few realtors and see what they think.. My specific loan prohibits renting it guess I was wrong in assuming it was an FHA specific thing.
Old 10-14-11, 07:15 PM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

As a buyer, I would be psyched to get a flooring credit and be able to choose what, if any, flooring I would put in there. But don't know how others would feel.

As kvrdave says, ask your realtor, that's part of why you hire them.
Old 10-14-11, 07:46 PM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

FHA does not allow you to purchase an investment property. You lived in the home and now your situation has changed. You are okay renting it. Only problem you could run into in the future is if you decided to purchase again. If you still owned property with FHA loan, you most likely would be prohibited in getting another FHA loan (there are some exceptions).

5 years in...will you break even?
Old 10-14-11, 08:15 PM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

Generally an FHA loan requires that you live in the property for 6 months, and then all bets are off. A friend of mine would buy with FHA, fix it up, move in a year, and do the same thing all over again. VA only allows you to have a single current VA loan, but FHA doesn't have that requirement that I've ever heard.

Not trying to talk you into being a landlord (even though there are excellent reasons to do so), but check your loan again. I've never heard of one that had a life long prohibition on renting it out.

Flooring allowance sounds nice, but it can gum up the works on financing, Find out from the realtor if there are any problems in financing it the way it is. Since it is a basement, there may not be. If there aren't, a flooring allowance is fine. But make sure it is, or isn't, in any purchase agreement. I've had stupid agents not put it in, and then assume it was, then get mad at me that we didn't honor it. Those conversations go like this....

Dumb agent: It says on the MLS that there is a $7500 flooring allowance, why aren't you honoring that?

kvrdave: It also says it is for sale for $175,000 and we accepted your offer of $150,000. We assumed you didn't take the allowance because you were giving us $25,000 less than the offer price, otherwise it would be in the contract. If you want to go with the $175,000 we will certainly honor the flooring allowance.

Dumb agent: But the MLS says there is a flooring allowance.

kvrdave: And there is at a price of $175,000. Once you negotiated away from that price, everything is up for negotiations, you know that.

Dumb agent: But the MLS.....
Old 10-15-11, 10:03 AM
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Re: Real Estate Question-Selling my house redo basement flooring or no?

As a potential buyer, if I walked into a house with a concrete floor with carpet glue remnants on the floor, I would probably not submit an offer unless I thought it was a steal. Rightly or wrongly, I wouldn't have a high opinion of how well the house was maintained if that was what I was presented with in the basement. Explaining to me that it was a result of recent flooding wouldn't help, either.

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